A bill intended to protect whistleblowers reporting fraud, waste and abuse in state and local government while outing those committing it was overwhelmingly rejected by a State Senate committee Monday after heavy opposition by the League of California Cities, the city auditors of Berkeley and Oakland and two notable campaign funders for the majority Democrats, the California Professional Firefighters and the California Labor Federation.

SB 1336 by Senator Leland Yee (D-San Francisco) was introduced to continue anonymity for those reporting improper governmental activity of the kind investigated through whistleblower programs operated by the State Auditor, the California State University and city and county auditors, but also to remove the secrecy now giving the same anonymity to the public employees found blameworthy for such abuses.

The bill passed the Senate Committee on Governance and Finance on a 6-1 vote on April 26, but the seven-member Senate Appropriations Committee today gave the bill three No votes (Christine Kehoe, D-San Diego; Mimi Walters, R-Laguna Hills; and Bob Dutton (R-Rancho Cucamonga), with four others not voting (Senate President pro Tempore Darrell Steinberg, D-Sacramento; Elaine Alquist, D-San Jose; Ted Lieu, D-Redondo Beach; and Curren Price, D-Los Angeles). This outcome contrasted with the committee's professional staff analysis, noting estimates of only minor costs resulting from the bill's implementation.

The bill's defeat leaves in place a system protecting and to that extent encouraging what in other contexts would be treated as white collar crime—typically in the form of defrauding the taxpayer of thousands or even hundreds of thousands of dollars in unearned pay or reimbursement for expenses not incurred on government business, the use of government resources for private occupations, or either ignoring or covering up for such larcenous exploitation by subordinates.

A summary from the most recent (August 2011) report of the State Auditor provides a flavor of the activity whose perpetrators the whistleblower programs do not identify, and how vigorously the responsible agencies pursue correction:

RESULTS IN BRIEF

The California Whistleblower Protection Act (Whistleblower Act) empowers the Bureau of State Audits (bureau) to investigate and report on improper governmental activities by agencies and employees of the State of California (State). Under the Whistleblower Act, an improper governmental activity is any action by a state agency or employee related to state government that violates a law, is economically wasteful, or involves gross misconduct, incompetence, or inefficiency.1

This report details the results of seven particularly significant investigations completed by the bureau or undertaken jointly by the bureau and other state agencies between July 1, 2010, and March 31, 2011. This report also outlines actions taken by state agencies in response to the investigations of improper governmental activities described here and in previous reports. The following paragraphs briefly summarize the investigations and the state agencies' actions, which are discussed more fully in the individual chapters of this report.

DEPARTMENT OF MENTAL HEALTH

An executive at the Department of Mental Health (Mental Health) wasted at least $51,244 in state funds in 2009, the one-year period that we examined, by employing a longtime senior official to perform activities that either were undertaken on behalf of a nonstate organization or did not serve a state purpose. In fall 2010 the executive directed the senior official to discontinue using state-compensated time for activities that we found did not benefit the State. Soon thereafter, the executive retired from state service, and the senior official began using leave while he awaited new work assignments.

DEPARTMENT OF CORRECTIONS AND REHABILITATION

The chief psychologist at a correctional facility operated by the Department of Corrections and Rehabilitation (Corrections) used his state-compensated time and state equipment to perform work related to his private psychology practice, costing the State up to an estimated $212,261 in lost productivity over nearly five years.

CALIFORNIA ENERGY COMMISSION

An employee and a personnel specialist at the California Energy Commission falsified time and attendance records to enable the employee—at the time of her retirement—to receive a payment for unused annual leave that was higher than the amount to which she was entitled, costing the State an estimated $6,589.

DEPARTMENT OF TRANSPORTATION

For nearly three years, a transportation planning supervisor for the Department of Transportation neglected his duty to supervise the work of a subordinate transportation planner, resulting in the transportation planner receiving compensation, including overtime pay, for which the State lacked assurance that the transportation planner performed adequate work to justify the compensation.

DEPARTMENT OF FISH AND GAME

A manager at the Department of Fish and Game improperly directed an employee under his supervision to use a state vehicle for commuting between her home and work locations at a cost to the State of $8,282 over a nine-month period. In addition, the employee improperly requested—and the manager improperly approved—reimbursement for $595 in lodging and meal expenses incurred by the employee near her work headquarters.

DEPARTMENT OF INDUSTRIAL RELATIONS

An official and a supervisor at a district office of the Department of Industrial Relations failed to monitor adequately the time reporting of four subordinate employees from July 2007 through June 2009.

STATE CONTROLLER'S OFFICE

An employee with the State Controller's Office failed to report an estimated 322 hours of absences over an 18-month period. Because her supervisor, a high-level official, failed to monitor adequately her time reporting, the State paid the employee $6,591 for hours she did not work.

UPDATE ON PREVIOUS INVESTIGATIONS

In addition to conveying our findings about investigations completed from July 2010 through March 2011, this report summarizes the status of certain findings described in our previous reports. Chapter 8 details the actions taken—or declined to be taken—by the respective agencies for seven previously reported investigations. The following updates have particular significance:

  • The Department of General Services (General Services) signed an agreement in June 2011 with a now-retired fleet division manager directing him to reimburse the State for his misuse of state vehicles for his daily commute. Our January 2011 report had revealed that the manager improperly used state vehicles for his daily commute for nine years. We estimated that the cost of the misuse for the three years for which complete records were available totaled $12,379. The terms of the agreement require the manager to repay the State the entire $12,379 at $200 a month from June 2011 through August 2016. The manager made his first installment payment in June 2011.
  • The California State University, Office of the Chancellor (Chancellor's Office) has implemented four of the five recommendations we made in our December 2009 report, which found that the Chancellor's Office had reimbursed a former official $152,441 for unnecessary expenses that did not further the best interests of the university or the State. The Chancellor's Office reiterated its assertion about the difficulty in implementing the remaining recommendation. This lack of action by the Chancellor's Office will permit its employees to continue an activity we identified as being wasteful and, therefore not in the State's best interests.